| Every company, no matter how large or small, ends up with problems that wind up in the lap of customer service. Whether you provide it yourself or have a dedicated team, you will have set up procedures and policies for dealing with the majority of issues. In most cases, your considered responses to issues will normally take care of the issue or complaint and make the customer happy to retain them.
The unfortunate truth is that often larger companies have such standard protocols that they really don't care whether it is appropriate or not. A while back, I purchased a product that I had used many years ago with great success but had not had a need for in many years. It had new packaging which was horrible and actually impeded usage and the product was horrible and did not even begin to perform as it had in the past. It was made by a major international brand so I wrote a letter of complaint about the "improvements" and informed the company that I would never buy the product again because it had ruined something special that I had made. 3 weeks later, I get a fat envelope in the mail. Inside there is no letter or note but there were 10 coupons for the product at no cost. Needless to say that simply angered me more and I told everyone I knew not only how bad the product was now but also the stupid response to the complaint. Large companies, particularly brand name ones, don't feel it is worth their time to customize a response such as a letter or a phone call there are thousands more customers out there.
For a small company that attitude can kill the business. Yet for many of them, it is the only kind of customer service that they know from their own experience. What large companies ignore and small companies often don't understand is the power of word of mouth comments. On average, if a customer is unhappy they will tell 20 people but if they are happy they will tell 7. With the advent of Twitter, Facebook and other social media, a bad comment could reach hundreds of thousands of people just as a good comment can.
Recently on Focus.com (a great business question and answer forum plus briefs and research), a man in Australia discussed an experience he had with a local bakery in a small city. Since he was on the local business development board, he wanted to know how to advise not only the bakery owner but other small businesses on how to provide better customer service to help grow their business.
Here is his story. He had arranged a very special birthday dinner for his wife at a local restaurant and invited many friends and family. There was a new bakery in town and he ordered a special cake to be delivered to the restaurant for the dinner. All the guests enjoyed the dinner and time came for the cake. It had never been delivered! Everyone was very disappointed and it helped put a pall on what had been a very festive occasion. The next morning the owner of the bakery called to apologize and offered a 40% off coupon on any future purchase. Needless to say the customer was not happy and was still sufficiently angry about the situation that he almost vowed never to use that bakery again. Except for the fact that the bakery owner had proactively made the call he failed miserably in attempting to turn around the situation and was facing some potential destructive word of mouth bad advertising. Everyone at the dinner probably already knew which bakery it was so if each attendee told 20 people, his new business could be badly hurt.
Interestingly most of the people who posted answers fell into the same trap as the bakery owner. Some suggested he should have delivered the cake to the man's house, others suggested a bigger discount or a free item. It was still the same thinking as usual. One person suggested the owner pay for the meal but the cost could be prohibitive to a new business
Leave it to me to take an entirely different approach to the matter so that the disaster might actually be turned into a marketing opportunity. The man in Australia thanked me on the forum for a different approach and selected my answer as the best of all.
My first suggestion was that the bakery owner needed to find out why the error happened and to put policies and procedures in place to prevent it ever happening again. That information should have been relayed to the customer during the call.
Just delivering the cake to the house or giving a discount is not going to improve the bad impression made on all the guests. There are a couple of possible ideas that might help make the situation better.
The first would be to have the customer invite as many of the guests as possible to his home or some other place just for a dessert birthday party. The bakery owner could make the cake and some other desserts. He could even joke that the dinner without cake was a "diet" birthday and now there was an "indulgent" birthday with several desserts. This type of customer service allows the man and his wife to have a new unique memory that is happy which is a lot more valuable than a discount coupon and an apology.
Another option is dependent on the size of the bakery. If it is large enough, invite everyone to the bakery one evening for the cake and other goodies. The owner could even show them around the bakery and explain how he uses the best ingredients or has "secret" ingredients or special touches they create for their products. Now he has created a special and unique event plus done some great marketing. The guests might start out by telling others of the birthday cake foul up but then they are likely to tell about visiting the bakery and how good the things were. It is not only a win for the customer but also for the bakery. The cost to the bakery becomes insignificant in view of the great marketing opportunity for the same cost.
Then there is a peripheral opportunity. Remember the restaurant? The owner or manager is fully aware that the bakery failed to deliver the cake. If anyone wanted to order some special dessert do you think the restaurant would recommend that bakery? Of course not and would probably let other restaurants know what happened. Not good for the bakery. The bakery should not involve any restaurant personnel in the new special event because their relationship is strictly business. The bakery owner should make an appointment with the restaurant owner or manager to discuss what happened. (Even though the restaurant was not at fault in any way, they know that what had been a great party was hurt by the bakery failure and leaves bad memories of the entire experience.)
The first thing the bakery owner needs to do is to extend his apologies to the owner or manager. He needs to explain what happened and what procedures he has put in place so that it never happens again. That is the first step towards gaining the respect of the owner. Everyone has had a similar problem at one time or another and knows what it is like. The bakery owner should take samples of some products he makes from bread to cookies to cakes for the restaurant management to try out. If the manager likes the efforts then the owner has a potential marketing opportunity. The first is some co-marketing even if it is nothing more than a small sign in each other's business. The restaurant lets customers know that they can order special cakes or desserts from the bakery for special occasions. The bakery tells customers that they can deliver special desserts or cakes to the restaurant for special occasions.
Another possibility is to offer to create a signature dessert, cake or pastry for the restaurant which would give them something special to advertise, offer to their customers and give them something unique that their competitors probably don't have. Of if the restaurant isn't interested in that, they might be interested in cakes or desserts that can be frozen and kept on hand for smaller special events like birthdays, anniversaries, etc.
Even if the restaurant is not interested in any potential relationship, the meeting is still worthwhile. If a customer talks to the owner or manager about a special dinner or party and says they will have a cake delivered the owner is unlikely to say that it shouldn't be ordered from a certain bakery because they are unreliable. The bakery might not get a recommendation but it also won't get "bad press." If the bakery owner is proactive to this extent he can certainly help prevent what might have been a negative comment on his bakery. The restaurant owner or manager will appreciate that they have been approached in a professional manner as one business owner to another.
Whether you provide customer service for your company, supervise others or have a manager, you need to instill in everyone the need to think beyond the first step in customer service. Most of the time that is all that is needed but sometimes the issues are more serious. What may not seem a serious issue to you may be very serious to the customer so you need to see the issue from their point of view. In the above case, the owner didn't take the time to appreciate how his failure to deliver the cake spoiled a special occasion that could not be duplicated as such. It required some creative thinking to create a different special occasion to mitigate the damage. Some companies are good at that type of thing but most are not.
What almost no customer service person ever considers are the peripheral "victims" of the screw-up such as the restaurant owner or manager. They seldom take the opportunity to turn a disaster into a marketing opportunity without trying to directly sell someone something else. We have all encountered customer service reps whose job it is to cross sell some other services or products when we are unhappy with what we have. That is not customer service it is sales. Truly considering your customer's side is the first step to providing the very best in customer service and you may be able to creatively turn a disaster into not only great service but an actual marketing opportunity.
| Every business owner is delighted when they get good referrals from any source. It would be wonderful if we could grow our business purely on referrals and save on marketing and acquisition of new customers.
Unfortunately, many referrals do not become customers for a variety of reasons so our marketing budget remains
a necessity. However, there are now companies out there that propose to help you out with referrals and coupons, at a cost of course. Whether they are a worthwhile service and whether the ultimate cost is something you can afford is something only you can determine. It is essential that you do a very careful analysis of offers and run the numbers.
Free referrals usually come from friends, family and satisfied customers. On occasion you might even get , or give, a referral from a competitor because they respect you and know that you can do something they can't. There are also times when you may offer a referral or finder's fee to someone. T
his is a common professional practice but it must be done with care. Most fees are a flat sum of money or a percentage of the value of the referral. You have to set your own rates for a finder's or referral fee and they may well vary depending on the circumstances. The following are the main items to consider in setting flat rates and percentages: your profit margin per item or service; the volume of the order; extra costs such as rush orders, special delivery costs; having to order from a more expensive supplier due to immediate needs or volume; special materials or experts; having to hire temp workers to complete order; and other costs specific to your business.
It is tempting to pay a referral fee the minute you get the referral but that is bad business. Whether you create a contract or something like a letter of intent, it is essential that the referring party understands that you will pay the fee only if it results in actual business and when you are paid for the first order or service. Otherwise, you can be throwing money away.
Recently, I got an e-mail from someone I had never heard of before. She said she would like to send me referrals through an online referral
group. It was free to join the group and you could pay cash or a gift card for referrals. Payment was not based on a referral resulting in business but any referral made. That type of arrangement means that the ones making money are the group owners because you pay a fee to initiate the payment to the person making the referral and those who will make referrals to any business just to get a referral fee. That becomes their business or part of it.
There may be perfectly legitimate referral groups out there but check them out thoroughly before you become involved. A referral can be a valuable business tool but only if it actually results in business for your company.
Whether you are an avid couponer or just clip ones that are useful for what you would normally buy, coupons are a part of our world today. Businesses successfully use coupons for a variety of reasons such as rewarding loyal customers, introducing a new product, gaining new customers and special purposes. There are as many ways to disseminate coupons as there are reasons to have them such as on the backs of cash register receipts, special mailings, in volume mailings such as Val-Pak, newspapers and magazines, e-mail, business websites and other Internet sites such as Facebook and Groupon.
While coupons can be an excellent and very acceptable marketing tool, they can also create serious problems. First of all and the most obvious issue is not only the cost of getting the coupons in the right hands, then perhaps processing or handling fees, but the coupon value should not be such that you actually lose money. There are coupons that are referred to as loss leaders that will create a loss but the assumption is that the customer will make other purchases as well that will make up for the loss. This is an extremely common marketing method of grocery stores either through store coupons or simply their weekly ad or a sign for an unadvertised special.
Over the years the most common complaints about coupons that I am aware of have been:
1. Expires very quickly
2. The savings are too small to be worth clipping it out or it will still be more expensive than another or generic brand.
3. It is the same coupon week after week or month after month. Why don't they just lower the price?
4. Too many restrictions such as days of the week, hours, locations, minimum purchase, discount only 1 item instead of entire purchase, having to buy other products to get free or discounted price and so on.
5. Major requirement to get coupon such as you have to sign up to get sales pitches, requires a computer with Internet connection or you can only get by "liking" on Facebook. For those of us who do not have and do not want a Facebook account this requirement is infuriating to say the least.
Coupon control is a major issue with many of the ways of distributing coupons to consumers so that not only can you control costs as much as possible but you can also carefully track redemption. Coupons sent out via e-mail to customers who have signed up to receive them offers the potential of the most control especially if each customer is assigned a unique number and that is included on the e-mail coupon. With a tracking system you can learn a lot about your customers and what they feel are worthwhile coupons and what are not.
Whether you do your own direct mail marketing or use a service such as Val-Pak, you have control over the certain demographics of your target market. Whether it is people in a certain zip code or in areas most likely to contain people who are homeowners, you do have control over how many coupons are sent out. Knowing that figure you can determine the effectiveness and/or interest in your product or service by the number of coupons redeemed. However, you must also take into account whether there is a seasonal nature to redemption or it is something that most people only need on occasion. For instance, if you own a carpet cleaning company, it is likely that your services will be most in demand before, during and/or after the winter holiday season. Then you want to decide whether to target that season for coupons to beat the competition or whether you want to target the rest of the year as people need the services throughout the year.
You may be able to track downloads from your website depending on what functionalities you have and also if you require some type of registration to get to the coupon. However, unless you have your website professionally designed with such functions from the beginning or the ability to add it, you may be able to gather no useful information or even know how many coupons are downloaded or printed out.
If you use something like Facebook, you basically have no control over anything except how long you will make the coupon available. Even that is no guarantee that you won't possibly face a disaster. A couple of years ago a popular grocery store chain in Indiana posted a $5 off coupon on their Facebook site. There were no purchase requirements and it was good for 5 days. The page suggested sharing information with others about the coupon. In 2 days they had to shut it down and refuse to honor the coupons after that date. It had cost them thousands and thousands of dollars and even worse was the fact that people were using the coupon but purchasing very little over the $5 coupon value. Needless to say, in addition to the large loss without gaining any profit from large grocery purchases, they took a big hit to their reputation. It was a disaster in every way for the grocery store chain. This is the danger of distributing coupons over which you have virtually no control. Since the goal of coupons is not only to gain new customers but to convert them into repeat customers you need to not only be able to control the distribution of coupons but to have a way of tracking their usage and whether you are gaining repeat customers. Well spent marketing money is a great investment but if you are throwing it out willy nilly and with no way of knowing if it is effective or not is a recipe for potential failure and certainly a disaster for your marketing budget.
Note: The US Postal Service has now started a service for small business direct mail marketing by using zip codes or targeted areas. No lists to buy or rent because the USPS already has verified addresses. You would have to determine if their service would be cost effective for your business or not.
There is also a new business model for coupons that is making a name for itself in a big hurry. The most well known of these new companies is probably the most dangerous to small businesses. Instead of asking a small business to lay out thousands of dollars for coupon marketing, they will give you money when customers purchase long term deeply discounted coupons from them. It sounds like a great idea for your business because instead of laying out money you are bringing it in. However, real analysis may reveal that it can cost you far more than you ever thought long term. In this economy many small businesses are operating on a very slim profit margin. You can absorb perhaps a 10% discount and at least break even over a short term. However, these new companies are asking you for deeply discounted coupons over a long term. Not only can these coupons create a loss for your company but over a long term could be disastrous. In addition most of these companies provide no tracking of customers at all so you don't even know if you are getting returning customers or not. There have been sites that sell restaurant coupons/gift cards at deeply discounted prices for years. But those do not have the questionable contracts that some of these new companies have that can be detrimental to small businesses. Plus, if you explore those restaurant sites you will notice that they are almost exclusively for already well known restaurants and particularly chain/franchise restaurants.
It is conceivable that this new coupon marketing model could potentially create legal woes for the companies. In order to pay one small business their first fees in 5 days, they are relying on income from new sales. Depending on the sustainability of that model, they may be treading perilously close to being thought of as a Ponzi scheme. In addition, as the economy improves there will be fewer and fewer companies willing to risk a chunk of operating costs in hopes of acquiring new customers that can be converted to repeat customers.
Acquisition of customers can be a costly business but you must do an analysis of what you are getting for your money, if you are truly targeting your market, what methods are most cost effective for your business and whether any company or service is costing you more than you can ever recoup. The more you analyze and the more questions you ask, the less likely you are to waste money or make a serious mistake. Beware of long term contracts until you see results from a trial run. You want the most bang for your buck and that means that you must be in control of the process and be able to track results one way or another. Do the math and don't be mislead by those almost "too good to be true" sales ploys.
In early April 2011, we learned of a major security breach at Epsilon that stole the names and e-mail addresses of over 20 major companies. Although this is a minor breach compared to those where private and financial information is stolen, it is still a problem that impacts not only the consumer but also the businesses who had entrusted their information to Epsilon. Obviously, the damage to Epsilon's reputation is considerable, their stock value has dropped and they may well lose some major clients over this. Many years of building a good reputation may be undone by this single incident. Several years ago, a large credit card processor had a breach with disastrous results. Because they had violated many of the security regulations and requirements plus not informing their clients of the breach in a timely manner the company lost most of its clients, had to pay huge fines and ultimately ceased to exist.
So what lessons can be learned from not only this most recent security breach but also from other breaches that were more serious?
Lesson 1 - Security
This is the most obvious lesson. How much and what kind of security you need is based upon many factors. There are the standard ones that almost everyone uses such as Windows firewall, anti-virus and anti-malware/adware programs. Keeping these resources constantly updated is absolutely essential. Expensive programs are not necessarily any better than free or low cost programs.
As you may have noticed, Microsoft is constantly issuing updates for both Internet Explorer and Outlook programs due to security issues. The solution to the Internet Explorer issue is easy to fix. Switch your web browser to Firefox, Google Chrome or several others that are available. Firefox has surpassed IE for web browsing and that is undoubtedly due in part to the lack of constant security issues.
E-mail is another area where security is an issue. Good anti-virus programs are a great benefit for actual e-mail in catching viruses, Trojans, and worms plus the new bots. However, no program catches them all. That leaves not only your e-mail but contact lists, calendars and other features vulnerable.
And what about the security of information you might need to send in an e-mail? There are many programs that can encrypt e-mails but the major problem with those are that the receiver has to have the same program to be able to decrypt and read the e-mail. There is a great solution that is provided by Zix Corp with their ZixMail product http://www.zixcorp.com/products/zixmail/. The product encrypts e-mails you choose then sends an e-mail to the recipient to go to the Zix very secure website to retrieve it. The receiver does not have to have the same program and it meets all security requirements of HIPAA and the banking/financial industry. There are probably other solutions to this problem but I am familiar with the product and have used it successfully on many occasions. They offer solutions for a single user to major corporations.
Network security is the next level of concern. Most home based and small businesses use wireless networks because their Internet Service Provider (ISP) provide wireless routers and also because no one wants cables strung all over the place. Unfortunately, wireless networks are far less secure than cabled networks although their security is enhanced when a password must be used to access the network. If you must use a wireless network, be certain to set it up with a password or have the installer set it up for you.
How can you protect private or financial information without the very high cost of serious security systems? Actually, there is a very simple, secure and cost effective solution for individuals and small businesses. Have a separate or stand alone computer that is not connected to the internet or any other computer in a home or small business network. No hacker can access a computer or its information if it is not connected to anything. Yes, it is more cumbersome and time consuming to transfer information to your secure computer by using flash (thumb) drives, CD's, external hard drives or other media but it is far less work than dealing with the fallout from a security breach. Don't forget to download and then delete any contact information that you may have collected from your website unless your hosting company provides exceptional security. The non-connected computer is also the best choice for keeping essential company information such as your accounting system. If you need to send an e-mail to customers or clients as a mass mailing, you can transfer that information to a connected computer or connect to the Internet only long enough to send the e-mail and then disconnect immediately.
Create a policy and even a checklist of procedures to use to ensure that you protect confidential information as fully as possible. Most states have enacted legislation on the requirements that must be met if you should experience a security breach. You can find the laws for each state at http://www.ncsl.orgdefault.aspx?tabid=13489. No matter whether your state requires it or not, your integrity demands that you notify every potential victim as quickly as possible.
If you are unable to accommodate a standalone computer or it is not a feasible option for whatever reason, then it is essential that you explore other security options and talk with experts about your needs. If you choose to utilize an outside company question them closely about their security system, how they handle breaches and what guarantees they can give.
Carefully assess the level of risk you may have for a breach and see if you might want to look into insurance that covers the potential costs of a security breach.
Lesson 2 - Warning
In this recent Epsilon breach, we have to assume that they complied with the laws of Texas in terms of reporting the breach to all the proper authorities and to their major clients whose data was impacted. However, what we do know is that they did not make that information public. It was five days later before the information about the breach was leaked to the public. We also don't know if they thought they could keep the information under wraps to protect their reputation or precisely why they didn't make any public announcement. Assuming that word won't get out is absolutely crazy because one way or another it will go public.
What I do know is that I was warned before the information became public by, of all companies, Kroger. A couple of hours later I got a warning e-mail from US Bank. Very shortly after I was aware the information was now being reported by the media I heard from Best Buy. It was seven days later that I heard from Capital One. I never did hear from CitiBank although I read much later that they had put out a warning on Twitter. I mean, how many people are going to follow their bank on Twitter?
The lesson here is to proactively warn every client or customer as quickly as possible whether it is your breach or that of your vendor. Although those you contact may be upset at first, they will also appreciate that you let them know as quickly as possible. You may want to check with your legal advisor first about what you want to say and how you want to say it to avoid any possible legal problems.
Delays in warning clients or customers or relying on something like Twitter to disseminate a warning only raises questions as to whether the company doesn't care enough about its customers, their information or their security to bother. In the Epsilon breach, were they trying to hide that they hired an outside company to send their e-mails for them? The point is that there is simply no good excuse not to warn customers. Your reputation could suffer far more from a delayed warning or no warning than from the knowledge of the breach itself. Honesty and integrity are always your best protection for your reputation.
Lesson 3 - Solution
What was Epsilon's last mistake? Since the cat was out of the bag about the breach, they never took the opportunity to say what steps they were taking to increase their security to prevent future breaches. One might think that it would be enough for them to explain that to those major clients whose customer information was compromised what steps they were taking. That is essential of course but is it enough? I personally don't think so for 2 reasons. The first is that you don't know what potential customers might be waiting for some announcement of improvements and when they hear nothing go elsewhere. The second might be hard to quantify but there will be customers who will ask questions of the banks and companies if their information will be safe in the future or if the bank or company will continue to use Epsilon and then decide whether to continue their relationship with that bank or company. Potential customers could ask if their information will be outsourced to anyone and who that company is. Although it is unlikely that many customers would withdraw their business or not do business with the impacted client, their level of trust will have been compromised. I know that I am continuing to wonder about doing business with at least 2 companies because of this.
Whether it is a breach by a vendor or your own, reassurance to your customers is vital. If you are not convinced that a vendor is doing enough or if it will take time for you to upgrade your security, let your customers know that you are changing vendors or what steps you are taking to avoid future breaches. Some PR type people will suggest that this is an unnecessary and potentially detrimental path to follow. They believe in the out of sight, out of mind concept and that keeping customers updated just brings the breach back to the forefront. I believe that customers are more likely to remain loyal and forgiving if they are kept informed. Customers realize that bad things can happen but it is what you do about them that matters.
With the constantly increasing ability of hackers to breach supposedly secure systems and networks, even the smallest company needs to establish the most secure practices possible for their situation. Write a policy and the procedures to be followed and make certain everyone knows and understands them. Prepare a plan to deal with a breach if it should happen including following state laws and notifying the appropriate authorities as well as informing those clients or customers who have or might have been impacted. Then determine what steps you will take to try to prevent such a breach in the future. Do not forget that the impact that being proactive and acting with integrity can do more to protect your reputation and your business than all the PR spin in the world.
| Many start-up and small business owners are totally unaware of whether they operate in a "right to work" state or not and are not even certain what "right to work" means in terms of employment. At some point in the growth of your business or even from the beginning you will find yourself working with one or more unions. It is critical to know whether your business is located in a "right to work" state or not and what that can mean to your business and how you manage it.
In order to understand the concept behind a "right to work" state, we first have to understand certain terms.
Closed shop - before the Taft-Hartley Act was passed in 1947, employers in a unionized company could lawfully agree that all eligible employees must join the union and that they would be fired if they did not pay their dues or if they were expelled from the union as a disciplinary measure. The Taft-Hartley Act outlawed the closed shop.
Union shop - the Taft-Hartley Act did allow the creation of a union shop where all new employees are required to join the union after a specified initial period of employment. The employer is obliged to terminate anyone who does not pay their dues; however, the union cannot demand that an employee be fired if they lose their union membership for any other reason. Today, if you hear the term closed shop it actually means a union shop.
Agency shop - although similar to the union shop, employees must pay the union dues but are not required to join the union. The employer is obligated to fire the employee for non-payment of dues.
Open shop - no employee is forced to join a union or to pay any dues. However, they are still covered by any collective bargaining agreements the union(s) may reach with the employer. The employer is under no obligation to fire any employee who does not join the union or does not pay dues. The federal government operates under open shop rules even though many employees in various areas are represented by unions such as air traffic controllers. In other words an employee has a "right to work" whether they join and/or pay dues to any union.
Whether by law or legislation 22 states and the territory of Guam are "right to work" states: Alabama, Arizona, Arkansas, Florida, Georgia, Idaho, Iowa, Kansas, Louisiana, Mississippi, Nebraska, Nevada, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia and Wyoming. Indiana, Missouri and New Hampshire have all introduced bills in their state legislature to become "right to work" states.
There are those who oppose the "right to work" concept primarily because it gives a free ride to non-union employees who still get the benefits of collective bargaining without contributing to the financial condition of the union.
Those who are pro "right to work" believe that everyone should have the right to join a union or not without penalty and that employers should have the right to fire or not fire anyone as they see fit and not because it is dictated by a union.
An employer in any union shop or agency shop state that has no union involvement in their business is not required to unionize or join a union to do business.
Besides the obvious implications for your business as to hiring and firing employees and your rights and obligations, what other impact can your state laws have on your start-up or business?
The answer is simple. Economics.
In the decade between 1998 and 2008, "right to work" states saw an increase of 2% in residents in the age bracket of 25-34 from 15.0 million to 15.4 million. In non-"right to work" states, that same age bracket population fell by 7%, from 25.7 million to 24.0 million. The trend in birth rates in "right to work" states and non-"right to work" states for that age group remained stable. Young people aren't fleeing northern states because they don't like cold winters, either. Chilly "right to work" Idaho enjoyed a sizzling 24% increase in its population aged 25-34. But sunny non-"right to work" California endured a 6% decline, despite a heavy influx of young adults from abroad. Most other non-"right to work" states simply aren't creating enough good jobs, either to keep its young adults home or to lure in young adults from other states.
Every year there are a number of surveys rating states and/or metropolitan areas for business climate and every reliable one shows "right to work" states and areas within those states in the highest ranks. Probably one of the most respected and thorough annual studies is conducted by Forbes, America's leading business magazine. Forbes ranks large and smaller metro areas based on a variety of factors, including taxes, energy, office space rent, cost of living, job and income growth, and quality of life. In the 2010 survey, eighteen of the twenty-five top-ranking large metro areas and eighteen of the twenty-five top-ranking smaller metro areas included in the study are located in "right to work" states. The top four large metro areas "for business and careers": Boise, Idaho; Raleigh-Durham, N.C.; Austin, Texas; and the Virginia suburbs of Washington, D.C., are all located in "right to work" states. Today the Forbes index shows that "right to work" status alone is an excellent predictor of overall business climate favorability. This is even more apparent when one focuses one's attention on the nation's biggest cities. The four largest-population "right to work" metro areas - the Virginia suburbs of Washington, D.C., Houston, Dallas and Atlanta - rank, respectively, 30th, 33rd, 26th and 27th, while the four largest-population metro areas in non-"right to work" states - Los Angeles, New York City, Phoenix and Chicago - respectively rank 120th, 99th, 117th and 124th.
Businesses and employees in "right to work" states generally benefit from less tax and government red tape. In non-"right to work" states, unions wield the power to get workers fired for refusal to pay union dues. A portion of those dues are used to support pro labor candidates for political office. Those politicians usually support bigger government, higher taxes, more government spending, and severe regulation of business. Although union membership has been dropping in recent years in the private sector, it has been growing as state and federal governments have grown. As I write this, Wisconsin is going through a major legislative battle to ban unions for public employees which includes fire, police and teachers. Thousands of protestors have gone to the capitol to encourage legislators to vote against the ban and Democratic legislators have hidden out or fled the state to prevent the potential passage of the bill. This legislation, if passed, would not make Wisconsin a "right to work" state but it might signal a first step in that direction.
Why is there suddenly such an interest in 3 states to change their status? Businesses create jobs - not unions. In some cases unions have actually cost a state jobs and businesses. For example, last year a large plant that manufactured parts for one of the Big 3 auto makers was slated to close in a non-"right to work" state. A buyer came forward and wanted to keep the plant open and hundreds of jobs intact but could only do it if the union would accept a cut in wages. The national union officials encouraged local union members to approve the proposal but the local union officials refused. A business and jobs lost due to defiance of economic reality. That state is one of the 3 states with bills in the legislature to become a "right to work" state.
A "right to work" law creates more businesses and more businesses mean more jobs. It's all about job creation! When a state legislates a "right to work" law, it adopts an economic development strategy that has already successfully and continuously withstood the test of time and under the most varied of conditions. States are facing increasing budget shortfalls and economic development has become a very high priority. With statistics showing business development and growth being concentrated largely in "right to work" states, it is no surprise that non-"right to work" states are seriously considering a change.